The Hindu Business Line : Slump delays Omax Autos plans to make chassis for Tata Motors

New Delhi, Dec. 15 Slump in the commercial vehicles industry has led to the Rs 700-crore Omax Autos delaying its plan to produce chassis for Tata Motors commercial vehicles.

“We are reviewing our production and expansion plans considering the market situation. Our Lucknow plant, which was to make chassis for Tata Motors commercial vehicles and begin production by the month end, is now being postponed to the next quarter,” Mr Naresh Tandon, Executive Director (Finance), Omax Autos, told Business Line.

The Delhi-based company, which garners about 85 per cent of its revenues making components for two-wheeler companies such as Hero Honda, Honda Motorcycle & Scooter, and TVS , had announced its plans to make chassis for Tata Motors earlier this year.

“Of the Rs 52 crore that we were to invest for setting up the Lucknow plant, we have so far invested Rs 20 crore towards the construction of the plant. In case of other facilities, we have shelved our capex of Rs 20 crore for plant upgradation and expansion during the fiscal,” said Mr Tandon.

Sales impact

The commercial vehicle industry has been hit the worst globally as well as in India. Domestic commercial vehicles sales last month fell almost 50 per cent compared with the same period the previous year. This has compelled commercial vehicle companies like Tata Motors and Ashok Leyland to cut production at their plants and reduce the number of working days.

The company official indicated that with majority of its revenues coming from the two-wheeler industry, its plant continued to be operational at more than 80 per cent capacity. “But this month being low in terms of sales, we would be producing at 60-70 per cent capacity,” added Mr Tandon.

On exports, he said the company’s exposure was about 4 per cent of the turnover and hence would not have a substantial impact from the global crisis. Omax has its manufacturing facilities at Manesar, Gurgaon, Dharuhera and one plant in Bangalore for TVS Motor.

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